3Clause 1, page 1, line 21, at end insert ("but there shall be no requirement to take out a stakeholder pension in the form of an annuity by a specified age").
The Commons disagreed to this amendment for the following reason--

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3ABecause it is inconsistent with the condition that a stakeholder pension must have tax exemption or tax approval.

Lord McIntosh of Haringey: My Lords, I beg to move that the House do not insist on their Amendment No. 3 to which the Commons have disagreed for their reason numbered 3A.

Moved, That the House do not insist on its Amendment No. 3 to which the Commons have disagreed for their reason numbered 3A.--(Lord McIntosh of Haringey.)

Lord Higgins: My Lords, this amendment relates to the question of annuities, which we debated at some length during earlier stages of the Bill. I think that the answer given by the other place to the amendment we put forward; namely, that,

"it is inconsistent with the condition that a stakeholder pension must have tax exemption or tax approval"

is most interesting.

The main point made during earlier debates was that the present rule, whereby those who have to take their pension are required to do so at the latest by the age of 75, is a matter of considerable concern, not least because the average age of the population is getting steadily higher and a number of people find that the rule is to their disadvantage. The debate in another place was rather curtailed because of the guillotine. It was clear throughout the debates that Ministers seemed to be complaining that they could not give specific answers because there was a guillotine when in fact the latter had been imposed by the Government.

However, having said that, perhaps I may concentrate on the answer which has now been given. It is of course the case that those taking out pensions receive tax relief when they contribute towards the pension, although it is also the case that they are taxed on that pension when they receive it. So, to that extent, the arrangement we have is asymmetrical. The Government have indicated that they are considering the issue. I wonder whether I may press the Minister further as to whether it is likely that they will reach a decision in the near future.

The main objection put forward by the noble Baroness, Lady Hollis, during the previous debate was that if people were not compelled to take an annuity they might spend the money and become a charge on public funds. I should have thought that that could be overcome if people were only allowed to take the sum, other than by an annuity, to the extent that the annuity which remains ensures that they are above the level of income support. It is also true to say--this is implicit in the Government's reason--that not only must you not become a charge on public funds but also, to some extent, you must take an annuity because if you cannot take it with you, you cannot leave it behind you. The concern increasingly in people's minds is whether the tax relief given is something which ought to bar people from taking a form of pension, other than an annuity, providing they do not become a charge on public funds.

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I merely wish to ascertain whether the Government's thinking has moved forward since the matter was debated in another place. It seems clear to me that something must be done, at least as far as concerns the 75-year rule.

Lord McIntosh of Haringey: My Lords, as he said, the noble Lord did debate this matter at some length when it was last before the House. At that time, we said that the Government were in the process of reviewing the drawdown rules. That is indeed the case, and the review includes consideration of the whole issue of mandatory annuity purchase. However, I do not want to raise the noble Lord's hopes too high. We are reviewing these issues on a not quite continuous basis, but on a frequent and regular basis.

From the fact that a review is taking place, the noble Lord should not draw the conclusion that we have accepted his arguments about annuities. The arguments are very fundamental. Indeed, I can put the main argument in one phrase: pension funds must be used to provide pensions. This is a deal. Pension contributions are made with tax relief. The noble Lord is right to say that the tax relief is on the contributions and not on the ultimate pension. Just before the election, the noble Lord's party suddenly came forward with the quite unexpected suggestion that the tax relief should be on pensions and not on contributions. That had never been debated anywhere and was a totally new proposition, which would have had huge inter-generational benefits and disbenefits that were never debated at any time. Presumably--God forbid!--if the noble Lord's party had won the election, that would have been a manifesto commitment which we might have been stuck with.

That is not the case here. There is a great deal of continuity in public policy of governments of both complexions. The public policy issue here has not changed. If you have gained tax relief for pension contributions, in the end that must be used for pensions; in other words, to ensure that you do not become a burden on the public purse. There are all sorts of ways in which that can be modified. The drawdown contributions introduced in 1995 were certainly a compromise. However, from the fact that a review is taking place, I do not wish the noble Lord to draw the conclusion that there is any agreement with the arguments that he and other noble Lords put forward when the Bill was previously before the House.

On Question, Motion agreed to.

LORDS AMENDMENT

20After Clause 18, insert the following new clause--

WAR PENSIONS FOR WIDOWS: ENTITLEMENT

(" .--(1) A widow in receipt of a widow's pension under any of the enactments mentioned in subsection (2) ("the DSS pension"), and in receipt of a pension paid under the Armed Forces Pension scheme shall on remarriage or when living together as husband and wife with a member of the opposite sex, only retain the Forces Family Pension (attributable).

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(2) The enactments referred to in subsection (1) are--
(a) the Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983, and any order re-enacting the provisions of that order,
(b) the Personal Injuries (Civilians) Scheme 1983, and any subsequent scheme made under the Personal Injuries (Emergency Provisions) Act 1939,
(c) any scheme made under the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939 or the Polish Resettlement Act 1947 applying the provisions of any such order as is referred to in paragraph (a),
(d) the order made under section 1(5) of the Ulster Defence Regiment Act 1969 concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment.").
The Commons disagreed to this amendment for the following reason--
20ABecause it involves charges on public funds, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Baroness Strange rose to move, That this House do not insist on their Amendment No. 20 to which the Commons have disagreed for their reason numbered 20A, but do propose Amendment No. 20B in lieu thereof--

20BAfter Clause 18, insert the following new clause--

WAR PENSIONS FOR WIDOWS: ENTITLEMENT

(" .--(1) Subject to subsection (2), a widow in receipt of a widow's pension under any of the enactments mentioned in subsection (3) ("the DSS pension") and in receipt of a pension paid under the Armed Forces Pension scheme shall on remarriage or when living together as husband and wife with a member of the opposite sex only retain the Forces Family Pension (attributable).
(2) Subsection (1) does not apply to a widow in receipt of a basic pension under section 44 of the Social Security Contributions and Benefits Act 1992; and a widow in receipt of such a pension who has remarried or is living together as husband and wife with a member of the opposite sex may not retain the Forces Family Pension (attributable).
(3) The enactments referred to in subsection (1) are--
(a) the Naval , Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983, and any order re-enacting the provisions of that order,
(b) the Personal Injuries (Civilians) Scheme 1983, and any subsequent scheme made under the Personal Injuries (Emergency Provisions) Act 1939,
(c) any scheme made under the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939 or the Polish Resettlement Act 1947 applying the provisions of any such order as is referred to in paragraph (a),
(d) the order made under section 1(5) of the Ulster Defence Regiment Act 1969 concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment.").

The noble Baroness said: My Lords, I beg to move that the House do not insist on their Amendment No. 20 to which the Commons have disagreed for their reason numbered 20A, but do propose Amendment No. 20B in lieu thereof.

Last week your Lordships sent this amendment about the attributable forces' family pension being for life, regardless of future marital status, back to the other place. It was debated there last Monday and I am most grateful to all the honourable Members in the other place who supported it--though, alas, not enough of them did so. The honourable Member for

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Windsor said that it was a very narrow amendment and that it was "ring-fenced". It is; it deals only with 2,650 ladies, not all of whom are going to remarry at once. However, if passed, it would be to the Government's financial interest to persuade them so to do.

After much thought, we decided on a new amendment to restrict the provision still further. This excludes specifically any lady in receipt of the state retirement pension. The purpose of Amendment No. 20B is to allow any younger widow the chance of starting a new life, with a new husband and a new father for her children, without financial hardship. If the lady is over 60, the chances are that her children will be able to stand on their own feet.

There is no legal, procedural or technical reason why acceptance of this amendment should compel the Government to make consequential changes to the occupational schemes of other groups of public pensioners. There is no uniform standard of provision across public service schemes from which acceptance of this amendment would represent an unprecedented departure. There are already significant variations in scheme regulations and funding arrangements; for example, death in service provisions for firemen and police are more generous than those currently available to service widows.

It is also claimed that, on ground of equity, similar provision would have to be made at significant extra cost for the much larger group of service widows who draw pensions under the main provisions of the Armed Forces occupational pension scheme. Over 80 per cent of those 68,000 service widows will be the widows of pensioners who died in retirement of natural causes. Most are elderly ladies who are not left with young children. This amendment could not possibly include them. This is not a case of "ping-pong"; it is simply a question of honour and of what is right. We believe that this new clause removes any possibility of doubt or of expansion beyond the 2,650 ladies concerned.

Last week my noble friend Lord Northbourne talked of the importance of fathers and families. He was supported by the noble Earls, Lord Mar and Kellie and Lord Longford; the noble Viscounts, Lord Hood, Lord Brentford and Lord Bridgeman; the noble Baroness, Lady Young; the noble Lords, Lord Warner, Lord Ahmed, Lord Sheppard of Liverpool and Lord Ashbourne; and my noble friends Lord Alton, Lord Rosslyn, and Lord Listowel; the noble Lady, Lady Kinloss, and myself. Although the debate was restricted to two minutes per speaker, we all felt that the importance of a father in a family mattered so much that we had to speak. None of us exceeded our two minutes; some of us even spoke for less.

I have already spoken of the children of war widows who visited your Lordships' House two weeks ago who are the very children to whom this amendment might mean much: four and five year-olds, Matthew and Dominic Beale, Charles Auckland, who came in a

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pushchair and told his mother I was a nice lady, and Jennifer Fox who wore a party dress, and how pleased they all were when the Doorkeepers and some of your Lordships spoke to them, turning their faces to father figures, like sunflowers to the sun. I beg to move.

Moved, That the House do not insist on their Amendment No. 20 to which the Commons have disagreed for their reason numbered 20A, but do propose Amendment No. 20B in lieu thereof.--(Baroness Strange.)

3.30 p.m.

Baroness Buscombe: My Lords, we are sympathetic to what the noble Baroness, Lady Strange, has said. This matter has now been debated in the other place where the Opposition indicated that they are supportive of this proposal on the understanding that it is strictly ring-fenced to relate to post-1973 war widows of servicemen who die or who are killed in the line of duty while still serving. That said, we do not think that it is right to return it to them at this stage. It is our hope and expectation that the Under-Secretary of State in the other place, Mr Rooker, will do as he said in debate and,

"metaphorically hotfoot it from this debate to the MoD to say what has been said here and in the other place, and ensure that that is properly addressed in the review".--[Official Report, Commons, 3/11/99; col. 390.]

In addition, I feel that it is important to press the Minister for assurance that this review is real, given the reasons stated for the Commons disagreeing to this amendment; namely,

"Because it involves charges on public funds, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient".

We are concerned that this reference to the review is inconsistent with the reason stating a concern that there may be a charge on public funds.